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MPower: Are Oil Stocks About To Heat Up?


If it seems like we were just talking about how far the price of oil has fallen, it’s because we were. But seemingly, out of the blue, the price has begun to creep back up toward $100 per barrel. During the first day of trading, after the bloody day on Friday, the price of oil jumped nearly $4, to bring the price over $95 per barrel, a 4% jump.

The trend nowadays seems to be how we can get away from our reliance on oil, and develop alternative energy sources. I have said in the past, I don’t believe there is a one size fits all approach to it, and the issue is far more complex than we can tackle here. However, I don’t believe we should, nor will we totally turn our back completely on oil.

We need all of these various sources working in conjunction with one another. Some sources are more efficient than others so it makes sense to rely on them in certain situations. Also, some of these renewable energy sources are too expensive for developing nations to afford, so they require the cheap efficiency oil and gas provides. Like I said there is no one size fits all approach.

Don’t just take it from me either. Billionaire founder and CEO of Tesla Motors (TSLA), Elon Musk, was even recently quoted as saying as much.

“At this time, we actually need more oil and gas, not less,” Musk said Monday during an energy conference in Norway, adding that he’s not someone to “demonize” fossil fuels. At the same time, “we must have a clear path to a sustainable energy future.”

If one of the world leaders in the fight against our reliance on fossil fuels says we still need to keep the oil and gas industry around, then maybe we shouldn’t get rid of them just yet.

Which is why I wanted to remind everyone about how good of an investment these companies can be for some. In addition to not being fully decoupled from fossil fuel products, these companies often pay very handsome dividends to their shareholders. Let’s see if we can track some down.

As perhaps one of the most popular oil and gas companies, Exxon Mobil (XOM) tops the list of results, filter for stocks only. Remember, Magnifi allows the investor to filter among various investment vehicles, depending on your specific goals.

With an over 3.5% dividend rate at $100, XOM pays its shareholders about 88 cents per share. As you build your position, you build on compounding gains and gains on your reinvested dividend. Think of it almost like a stock market cheat code. These positions left alone for decades can turn into quite the nest egg.

Now I hope you can see the power of not only owning names like XOM, but dividend investing as well. These companies might not be inventing the next big thing, but making money never goes out of style.

Today’s feature: High Yield Oil Stocks

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Adam Mesh

Adam Mesh is the founder and CEO of WealthPop.com. Adam has extensive experience in the stock market, as well as being a options trading coach for many years. Our mission is to empower the average, everyday individual to become a better investor and trader.

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